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This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Monday, December 22, 2025. Here’s what we’re covering today: interest rates are finally easing up and what that means for your next commercial mortgage, why property insurance costs might actually be leveling off after years of pain, and how lenders are approaching new deals as we head into 2026. We’ll also hit the latest national real estate headlines – including a high-profile loan default in California and a bargain sale of a New York office tower – and then we’ll spotlight Florida to see how one booming region is handling both growth and risk.

Interest rates are finally headed downward. The Fed cut rates again this month, bringing its benchmark to roughly 3.5%, down from a peak above 5%. Long-term yields are around 4% now, and commercial mortgage rates have inched down as well. Loans that might have cost 7% interest a year ago are closer to 5–6% for the best deals today. It’s still much higher than the rock-bottom financing of a few years ago – so many owners refinancing now are seeing bigger loan payments than they’re used to – but at least the trend is improving.

Property insurance has been a major headache for real estate, with premiums skyrocketing in recent years, especially in high-risk areas. The good news is 2025 finally brought some relief: those steep rate hikes have largely stopped, and in many cases premiums even ticked down a bit. That eases pressure on budgets for landlords. If you own a building on a Florida coast or in a wildfire zone, you might still be facing painfully high insurance bills – those spots haven’t gotten much reprieve – but overall it looks like the worst of the insurance crunch has passed for now, giving owners a breather as we head into 2026.

Now let’s talk about what’s happening in the market. Deal activity has shown some life recently, with third-quarter sales of large properties jumping as bargain hunters step in. And bargains are out there: in Los Angeles, a luxury apartment project just defaulted on a $400 million loan – even multifamily isn’t immune to high debt costs – and in New York, an office tower sold for roughly 40% of what it was worth ten years ago. These are painful resets, but they’re attracting investors with cash ready to buy at huge discounts. Lenders are starting to thaw as well. After pulling back last year, some banks and debt funds are cautiously coming back – still with strict terms and big equity requirements, but at least credit isn’t getting any tighter. With rates down and property values reset, financing should gradually get more accessible, making more deals pencil out.

Finally, Florida is our regional spotlight. Florida’s one of the fastest-growing markets, with people and companies flocking to Miami and keeping demand high. But it’s also a challenging market due to high insurance costs and hurricane risk. Lately, there’s been some good news: after years of brutal insurance spikes, state reforms and two quiet storm seasons have helped push premiums down a bit in Florida – a welcome relief for property owners. Of course, one big hurricane could send those costs right back up. Still, Florida’s long-term outlook remains strong given booming population and business growth – despite those near-term risks.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Friday, December 19, 2025. Here’s what we’re covering today: an overview of interest rates, insurance costs, and lending conditions shaping commercial real estate; the latest national news on capital markets, deal activity, and signs of stress or recovery; and a regional spotlight on Dallas–Fort Worth’s booming market.

Interest Rates & Lending: The financing climate for commercial real estate is finally improving as we close out 2025. The Federal Reserve delivered its third straight rate cut this month, bringing the benchmark federal funds rate down into the mid-3% range – a big drop from the 5%+ highs we saw a year ago. For borrowers, that’s translating into modest relief: commercial mortgage rates are broadly lower than earlier this year, with many banks now quoting loans in the high-5% range instead of the 7% or more we saw over the summer. It’s not a return to cheap money by any means, but deals that didn’t pencil out at 7% might start making sense at 5.8%. Crucially, long-term borrowing costs remain sticky – the 10-year Treasury yield is still hovering around 4.1% – so while financing is cheaper than it was a year ago, it’s still relatively expensive compared to the ultra-low rates of the 2010s. The Fed is signaling it may pause further cuts for now, so borrowers shouldn’t bank on dramatically lower rates overnight. But the direction of travel has been positive, and lenders are slowly regaining confidence. In fact, some big players are jumping into the credit space: Blackstone, for example, just teamed up with a partner on a $1 billion program to fund small-balance commercial mortgages. And Nuveen recently raised over $600 million for a debt fund targeting transitional real estate loans. These moves show private capital is eager to fill financing gaps, which is good news for dealmakers.

On the insurance side, 2025 brought a bit of stability after a turbulent few years. Commercial property insurance premiums had been surging since 2020 – in disaster-prone areas like coastal Florida or California wildfire zones, some owners saw their insurance costs double. This year, however, the market has steadied. Insurers have returned to writing policies more actively outside the highest-risk regions, and for many well-managed properties the rate increases have leveled off or even ticked down slightly. If your buildings are in a low-risk location with strong safety measures, you might actually get a flat renewal after years of steep hikes. That said, coverage in hurricane and wildfire zones is still a pain point: carriers continue to demand higher deductibles and stricter terms to offset the risk. Overall though, compared to the chaos of 2023, the insurance outlook heading into 2026 is more balanced – a welcome breather for operating budgets and lenders alike, since manageable insurance costs make underwriting new loans easier.

National Market Update: Across the country, commercial real estate is showing early signs of a rebound amid this easing financial backdrop. Let’s start with transaction activity. After a very slow first half of the year, investment sales roared back in the third quarter. Big-ticket deals – those over $10 million – jumped by nearly 50% from Q2 to Q3, according to industry data. That’s the strongest quarterly surge in years and a clear signal that investors are coming off the sidelines. Volume is still below the peak frenzy of 2021, but it’s a marked improvement from the deal drought of late 2022 and early 2024. What’s selling? Primarily multifamily, industrial, and high-quality retail properties. Those sectors held up best through the downturn and are drawing the most buyer interest now. Multifamily in particular remains in demand: despite concerns about oversupply in some Sun Belt cities, apartment values nationally have proven resilient. In fact, on average, multifamily pricing is slightly up compared to a year ago. By contrast, office assets are still a tough sell – office transaction volume and pricing are both deeply depressed. Even with some recent glimmers of hope in that sector (which I’ll get to in a moment), office buildings have a long road to recovery, and buyers remain very cautious unless it’s a prime, fully leased property at a bargain price.

Speaking of prices and values, the market seems to be finding its footing. Commercial property values overall have stopped falling and even notched small gains in certain areas. An index of deals across all property types showed pricing per square foot rising about half a percent last quarter – nothing huge, but notable because it’s the first uptick after several quarters of decline. It suggests that buyers and sellers are finally nearing consensus on where values should be in this higher-rate environment. Again, there’s a big split by sector: industrial properties and essential retail centers (like grocery-anchored shopping centers) are holding their value best, some even appreciating modestly this year. Apartment building values, as I mentioned, are stabilizing as well – many investors believe the worst of the rent slowdown is over and are looking ahead to an eventual return of rent growth as new construction cools off. On the other hand, office valuations continue to slide. We saw office prices drop another few percent in Q3, and they’re down well over 20% from pre-pandemic levels in many cities. The silver lining is that the pace of office declines has slowed, and there’s a sense that opportunistic investors are circling trophy assets in hopes of a turnaround or repurposing play. But for now, any stabilization in values is mostly outside the office sector.

What about the capital markets and distress? Well, we’re not out of the woods yet, but conditions are improving here too. Commercial lending had been very tight for the past year – banks pulled back, and the CMBS market (where loans are bundled into securities) was virtually frozen in late 2022. Now that picture is gradually changing. Securitized lending is inching back to life: new CMBS issuance has picked up recently as investors become more comfortable with the risk, and spreads have narrowed from their peak. We actually saw a couple of large single-borrower CMBS deals come to market this quarter, which would have been unthinkable a year ago. Meanwhile, banks and life insurance lenders are cautiously quoting new loans again, especially now that the Fed has eased off the brakes. We’ve heard of regional banks offering refinancing terms in the 6% range for solid deals – that’s still higher than borrowers want, but a lot better than the 8% or higher some faced when rates peaked.

Lending conditions remain selective, however. Lenders are favoring lower-leverage loans and strong sponsorship. If you need high leverage or have a weaker tenant profile, it’s still tough to get financing without bringing in mezzanine debt or more equity. A lot of property owners with loans maturing now are choosing to put in extra cash to pay down debt rather than refinance the full amount, because values dropped and lenders won’t lend as much as before. The good news is, each month that rates drift down, a few more of those refinancing scenarios start to work out instead of ending in default. And there are signs of life in the debt markets: debt funds and private lenders are actively hunting for deals, often stepping in where banks won’t. The mere fact that we’re talking about new lending programs (like that Blackstone initiative or other private credit funds launching) is itself a positive sign – it means capital is moving again.

Of course, we can’t discuss capital markets without acknowledging distress. There’s a backlog of troubled properties out there, especially offices and older retail centers, that are struggling with vacancies and high debt costs. Commercial mortgage default rates climbed through 2024 and hit uncomfortable levels this year. By the latest estimates, roughly 8% of all securitized commercial mortgages are delinquent, and if you include loans that are current but in special servicing (essentially on the watchlist or getting restructured), about 11% are in distress. That’s the highest distress rate we’ve seen in over a decade, though not quite a 2008-level crisis. Office properties make up a big chunk of these troubled loans – many downtown office towers are facing maturity defaults (where the loan comes due and they can’t refinance). We’re also starting to see some multifamily loans go bad in cities where there was overbuilding. For example, a huge apartment complex in Manhattan went delinquent this fall when its owner couldn’t refinance the mortgage, and in places like Denver and Austin, a wave of new luxury apartment supply has led to higher vacancies and some pain for developers who borrowed at low rates and now are squeezed by high interest costs. The expectation is that we’ll see more loan workouts and even foreclosures in the first half of 2026 as owners and lenders renegotiate terms. However, unlike the last crisis, there’s a lot of capital sitting on the sidelines ready to snap up distressed assets at the right price. Private equity funds, hedge funds, and even some institutional investors have been preparing for this moment. They’re essentially saying, “We’ll buy the note or the building if the bank needs out.” This safety net of opportunistic capital is one reason we haven’t seen an outright crash – prices adjust and those properties eventually trade rather than languishing.

Now, recovery signals are emerging that balance out that distress. Let’s talk about a few positive trends: First, the broader economy is holding up. Job growth has slowed, which the Fed actually welcomes to tame inflation, but we’re not in a recession. Unemployment is around 4.6%, and consumer spending is still fairly healthy. The holiday retail season is on track to set a new sales record (over $1 trillion by some forecasts), which bolsters the retail real estate sector. Malls and shopping centers that focus on experience or daily-needs retail are seeing solid foot traffic. In fact, retail real estate investment picked up this quarter – more retail space traded hands in Q3 than any quarter since 2022, as investors regain confidence in the shopping sector’s stability.

Next, here’s something I wouldn’t have predicted a year ago: office leasing is showing hints of a rebound, at least in the top markets. Companies have been slowly bringing workers back, and office attendance recently hit its highest post-pandemic level. Kastle Systems – the keycard tracking firm – reported that office buildings nationally averaged over 50% occupancy on weekdays for the first time since early 2020, and some cities like Miami are regularly above 60%. That’s still far from the old normal, but it’s progress. More importantly, demand for quality office space is real – tenants are upgrading to better buildings to entice employees to come in. We’re seeing this in New York and San Francisco especially: after years of rising vacancy, those markets saw positive net absorption recently. San Francisco’s office vacancy dipped slightly last quarter, and landlords there report more tours and even some tech companies expanding again. Manhattan had a few big leases signed in the past month that absorbed high-profile vacant space. It’s not a boom by any stretch, and secondary older buildings remain in trouble, but these green shoots suggest the office market is bottoming out in the prime locations. Additionally, some beleaguered office assets are finding new life through conversions – Washington D.C., for example, has been converting obsolete offices into residential units, which helped trim its office glut a bit and provided much-needed housing. All of this indicates the office sector is beginning to creatively adapt rather than just decline.

Another recovery sign: Real estate liquidity is improving. One index that tracks the ease of buying and selling property (created by Madison International Realty) has risen for six consecutive quarters. It’s now at its highest point since early 2022, which means investors feel more confident they can enter and exit deals. Part of this is due to the Fed’s policy shift – as soon as rate hikes stopped and cuts began, confidence started to creep back. The public markets mirror this too: REIT stocks have come off their lows and capital raises are happening again. Just this week, a couple of REITs managed to issue new equity or debt successfully, something that was virtually closed-off earlier in the year. We even see specialty sectors like data centers and life science labs attracting fresh capital thanks to long-term demand drivers. All in all, the capital flow is coming back, albeit carefully.

Regional Spotlight – Dallas–Fort Worth (DFW): Now, for our regional spotlight, we turn to what might be the country’s most dynamic real estate market right now: Dallas–Fort Worth. If it feels like we mention Texas a lot, it’s because so much is happening there, and DFW in particular has been on a tear. The Dallas–Fort Worth metro area is booming in almost every way – population growth, job creation, corporate relocations, and real estate investment. This momentum is turning DFW into one of the most influential markets in commercial real estate, and national firms have taken notice. In fact, a trend this year has been big outside companies snapping up local Dallas real estate players to establish a foothold. Let me give you a few examples: Colliers, one of the global brokerage giants, acquired a prominent multifamily investment sales team based in Dallas to bolster their presence. Another major firm, Cresa, just bought a local tenant representation brokerage (one with some star pedigree – it was originally tied to NFL legend Emmitt Smith) as part of its expansion in North Texas. Even beyond brokerages, we saw Stewart Information Services, a national title insurance company, acquire a Dallas-area property services firm. The strategy is clear – everyone wants to be in Dallas.

Why is DFW so hot? A few reasons stand out. One is the pro-business climate in Texas: lower taxes, fewer regulations, and a cost of living that’s attractive for companies and workers. That has fueled a massive wave of corporate headquarters relocations to Dallas. Since 2018, about 100 companies have moved their HQ to DFW – almost 20% of all big corporate moves in the U.S. That’s huge. When a company like Caterpillar or PGA of America (just to name two recent ones) moves to Dallas, it brings employees, demand for housing, need for office space, more flights at the airport – it’s an economic catalyst and it feeds the real estate market.

Another factor is DFW’s historic base of real estate talent and capital. This metro has long been home to heavyweights like CBRE (the world’s largest real estate services firm, which actually moved its headquarters to Dallas a couple years ago), Trammell Crow (a legendary developer), and many others. There’s a deep pool of investors and developers who know the market intimately. Add to that a bit of Texas swagger – you have high-profile figures like Jerry Jones (the Cowboys owner and a big real estate developer) and Mark Cuban (another investor) who are active in Dallas real estate. There’s a sense that deals get done in Dallas through relationships and local know-how, so an outsider firm often finds it easier to just buy a local team rather than start from scratch.

Then there’s the growth story: DFW’s population is still skyrocketing. It’s already the fourth-largest metro in the country and gaining fast. That means constant demand for new housing, warehouses, shopping centers, you name it. At the same time, Dallas is diversifying. It’s not just oil & gas or telecom anymore; it’s finance, tech, logistics, even entertainment. Fun fact: they’re launching a new commodities and stock exchange in Dallas (cheekily nicknamed the “Y’all Street” exchange) with aims to compete with New York’s financial markets. And major finance firms are setting up large operations there – Goldman Sachs is building a huge campus in Dallas, and Wells Fargo is expanding as well. This financial sector growth boosts the region’s clout and should keep capital flowing locally.

From an investment standpoint, DFW was just ranked the #1 market to watch in the Emerging Trends in Real Estate 2026 report (that’s a widely followed annual survey by PwC and ULI). It beat out all other U.S. cities for overall real estate prospects next year. And in 2025, Dallas led the nation in commercial property investment volume – roughly $18 billion of deals were done there, more than even New York or Los Angeles. We’re talking big trades in every sector: huge industrial portfolios, new office tower developments, massive master-planned communities, you name it. The takeaway is that Dallas–Fort Worth isn’t just a regional powerhouse; it has become a national bellwether for real estate. As one expert put it, if you’re in commercial real estate and you’re not in DFW, you might be late to the party. The market’s size, velocity, and future growth potential make it a proving ground for the industry. We’ll continue watching DFW’s evolution – from ‘Texas hot’ to perhaps an equal peer of the coastal giants – with great interest.

Wrapping Up: Bringing it back to the big picture, the end of 2025 finds the commercial real estate world in a cautiously optimistic place. We endured the pain of rising interest rates and a virtual standstill in dealmaking over the past two years. Now, at long last, borrowing costs are edging down and activity is picking up. There are still challenges ahead – a lot of debt to refinance, some markets facing oversupply, and an economy that’s rebalancing. But the mood has improved markedly from the gloom we had this time last year. You can feel that shift in conversations with investors and brokers: it’s no longer all doom and bust; people are talking about opportunities, about positioning for a recovery. 2026 won’t be without bumps – I expect we’ll see more distressed sales and maybe some high-profile defaults, especially in the office sector. However, there’s a general sense that the worst is behind us. Real estate, after all, is cyclical, and it looks like the cycle is turning up again.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Thursday, December 18, 2025. Here’s what we’re covering today: updates on interest rates and insurance costs, the latest commercial real estate news, what’s happening with lending and distress, and a regional spotlight on San Francisco’s downtown.

Interest Rates & Insurance

Commercial mortgage rates remain elevated but have eased off their highs after recent Fed rate cuts. For quality borrowers, loans are getting done around the 6% range. That’s still high relative to a few years ago, and refinancing low-rate loans from earlier in the decade remains challenging. The good news is rates are no longer spiking, so new deals are slightly easier to underwrite. On the insurance side, property insurance premiums have started leveling off after several years of sharp increases. Insurers aren’t slashing rates, but those double-digit hikes have calmed down, especially for buildings with good risk management. In high-risk coastal areas, this moderation is providing a bit of relief after some brutal years of rising costs.

Market & Lending Conditions

Nationwide, commercial real estate is gradually finding its footing again. Lending is picking up as banks, life insurers, and private debt funds cautiously return to the market. In fact, mortgage origination volumes have rebounded from last year’s lows, a sign that buyers and sellers are finally meeting on price. Property values, which fell in 2024 amid higher interest rates, have largely stabilized and even ticked up in stronger sectors like industrial and retail. Cap rates rose earlier with bond yields but now seem to have plateaued. Lenders are still selective and requiring more equity, but the financing freeze is thawing and deal flow is improving. There are still pockets of stress – the office sector, for example, remains under pressure with high vacancies and many owners facing refinancing hurdles. Even so, we saw a small bright spot as the national office vacancy rate inched down in the third quarter for the first time since 2020, hinting that a bottom may be forming. Overall, while it’s not “all clear” yet, there’s a sense that the worst of the downturn may be behind us as we head into 2026.

Regional Spotlight – San Francisco

For our regional spotlight, we turn to San Francisco, where downtown has been a bellwether of post-pandemic struggles. The city has endured one of the worst office slumps in the country – vacancies soared above 30% this year and property values plunged as remote work emptied out buildings. In response, local leaders are pushing aggressive plans to reinvent downtown. Just this week, the city approved new incentives to convert unused offices into housing, hotels, and other uses, offering fast-track permits and tax breaks to spur a 24/7 mixed-use neighborhood. Meanwhile, some tech firms are nudging employees back to the office, and the top-tier buildings are starting to attract tenants again even as older offices languish. Reviving San Francisco’s core won’t happen overnight, but these efforts and a nascent uptick in demand are reasons for cautious optimism going into 2026.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Wednesday, December 17, 2025. Here’s what we’re covering today: the latest on financing conditions, key updates in the commercial real estate market, and a regional spotlight on a big West Coast office shake-up.

Let’s start with the mortgage, insurance, and lending landscape. After a year of tight money, we’re ending 2025 with a bit of relief. The Federal Reserve’s recent rate cuts have brought its benchmark rate down to around 3.6%, making borrowing slightly cheaper than a year ago. New commercial mortgage rates still hover near 6% – high, but well below last year’s peaks. Lenders remain cautious, with banks demanding more equity and stricter terms than they did in the boom times.

Meanwhile, commercial property insurance premiums have finally plateaued after years of sharp increases. We haven’t seen another year of double-digit jumps. Insurance is still expensive – especially in hurricane and wildfire zones – and carriers are pushing owners to beef up property protections, but at least rates have stopped spiraling upward.

Now on to the broader market: 2025 has been unpredictable but is ending with some signs of stabilization. Investment activity has picked up in recent months. In the third quarter, big-ticket property sales hit their highest level since 2022 as buyers and sellers started finding common ground on pricing. With financing a bit easier and prices adjusting, some sidelined capital is trickling back into deals. Even a few distressed assets have changed hands at steep discounts, with opportunistic investors betting they can ride out the storm and profit when values recover.

Yet not everything is rosy. Office real estate remains the problem child. Remote and hybrid work keep demand subdued, and many downtown office buildings are suffering from record-high vacancy rates. Office loan delinquencies hit unprecedented levels this year, forcing many lenders and owners to extend loans rather than foreclose. There is a silver lining: for the first time since the pandemic, U.S. office vacancy actually ticked down slightly last quarter. It’s a tiny improvement, but it hints that the worst of the office glut might finally be passing.

Other property types are in better shape. Industrial warehouses remain a bright spot with low vacancies and minimal distress. Retail is fairly steady, with high-end and experiential retailers getting a boost from younger consumers eager for in-person shopping. Multifamily has softened as a flood of new apartments gives renters more choices – vacancies are up and rent growth is down. But long-term housing demand remains solid, and well-located apartments continue to attract investor interest.

For our regional spotlight today, we turn to San Diego, where a major landlord just pulled the plug on downtown. Irvine Company sold its last downtown San Diego office tower at roughly half of its previous value. It’s a dramatic exit that highlights how troubled that market is – downtown office vacancy has climbed above 35%. Irvine is refocusing on suburban campuses like La Jolla and University Town Center, which it sees as more stable. Meanwhile, the buyers who scooped up that heavily discounted tower aren’t giving up on the city’s core. They plan to renovate the largely empty skyscraper for smaller, modern tenants – essentially betting that buying at a steep discount today will pay off if and when the downtown office market recovers.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Tuesday, December 16, 2025. Here’s what we’re covering today: an update on interest rates and the lending climate, the latest commercial real estate news including major retail deals and improving office attendance, and a spotlight on the South Florida market.

Let’s start with the big picture on financing. Commercial mortgage rates remain elevated but have eased slightly in recent months. The Federal Reserve’s rate hikes earlier in the cycle pushed borrowing costs to multiyear highs, and even though we’ve seen a couple of rate cuts this fall, interest rates are still much higher than borrowers enjoyed a few years ago. Many new commercial loans are coming in around the mid-6% range, whereas loans that matured this year often had rates in the 4% range. This gap means refinancing can be painful for owners, and some deals still struggle to pencil out. Lenders are responding by being choosy – underwriting is tighter, and banks in particular have pulled back on riskier property types. Life insurers and private credit funds are filling some of the gap, but overall credit conditions for real estate remain on the cautious side. Another factor on everyone’s radar: insurance costs. After the turbulent spike in property insurance premiums over the past couple of years, the market is a bit more stable now, especially for properties in non-catastrophe areas. Still, in regions prone to hurricanes, wildfires, or floods, insurance is expensive and often a deal hurdle. Investors and lenders are paying close attention to coverage costs and deductibles before they close deals.

Now onto the latest national real estate news and capital markets updates. Despite higher financing costs, transaction activity in 2025 has been more resilient than many expected. In fact, investment sales volumes this year are up from the lows of 2024, as buyers and sellers gradually adjust to the new normal of interest rates. A lot of capital that sat on the sidelines is now on the move. Just this week, for example, a major partnership led by Bain Capital announced it raised $1.6 billion to invest in open-air shopping centers, especially those anchored by grocery stores. That’s part of a broader trend: investors are flocking to necessity-based retail assets, which have shown surprising strength. Nationwide, retail real estate fundamentals are solid – vacancies are low and rent growth is steady – so institutional money is pouring in. We’re even seeing big players making bold moves: Oxford Properties, a global investor, just entered the U.S. retail sector by acquiring shopping centers in Texas, and another investment group including Blackstone struck a $1.5 billion deal for a retail portfolio in Hawaii. These deals signal confidence that well-located retail centers will thrive even in a choppy economy.

What about the office sector? There’s a bit of good news on that front: new data show office usage is at its highest level since the pandemic began. Average office attendance nationally is still below 2019 levels, but it’s the closest it’s been in six years. Kastle Systems’ workplace occupancy tracker hit about 56% recently – not exactly a full house, but a clear improvement from the half-empty offices we saw a year or two ago. Cities like New York and Dallas have steadily increased their in-person work rates, and Miami is leading the pack with office attendance now not far off from pre-COVID levels. This uptick suggests that return-to-office policies and a stronger job market are gradually bringing workers back. Still, the office market has a long road ahead. Vacancy rates remain high in many downtowns, and a wave of lease expirations and loan maturities is coming due. Lenders and landlords continue to grapple with high office delinquency rates – roughly one in ten office loans is delinquent right now – and many troubled properties are winding up in special servicing or being restructured. In short, the office sector’s pain isn’t over, but these small signs of life are welcome news for landlords.

Beyond offices, other commercial real estate sectors have been a mixed bag. Multifamily apartment construction boomed over the last couple of years, especially in Sun Belt cities, which has pushed vacancies up slightly and tempered rent growth in some of those markets. However, housing demand is still strong overall, and well-located apartments continue to lease up, just with a bit more renter caution. Industrial properties – warehouses, distribution centers, and even niche areas like outdoor storage yards – remain darlings of the industry. High demand from e-commerce and logistics keeps industrial vacancy very low nationwide, and investors big and small are eager to buy anything with a steady warehouse tenant. Even more specialized sectors such as data centers and life sciences labs have their own story: data centers are booming with the growth of cloud and AI, while lab space for biotech has hit a speed bump as funding in that industry slows. So it truly depends on the property type, but generally, cash is targeting the segments with the strongest cash flows.

Now for our regional spotlight: South Florida. Few markets have been as dynamic as South Florida in recent years, and it continues to grab headlines. Miami in particular has been a standout – as I mentioned, it’s leading the nation in office attendance recovery. Only about 15% fewer people are in Miami offices now compared to pre-pandemic days, which is a far better recovery than most major cities have managed. This reflects South Florida’s economic momentum: an influx of finance firms, tech startups, and new residents moving in from the Northeast and elsewhere. The result is robust demand for commercial space. Office landlords in Miami are seeing improved foot traffic, retailers are benefitting from population growth, and the apartment market, while cooling slightly from its frenzy, is still one of the tightest in the country due to the sheer number of people relocating. On top of that, South Florida has a thriving industrial scene, with warehouses and distribution hubs staying busy thanks to Miami’s role as a trade gateway to Latin America. However, it’s not all smooth sailing in the Sunshine State. The region faces steep challenges with insurance and climate risk. After several active hurricane seasons and costly storms, property insurance premiums in Florida have soared. Some insurers have even reduced exposure in the state, which drives up costs for owners and can make it tricky to finance deals when the insurance bill is sky-high. Additionally, rising sea levels and flood risk mean investors must take a hard look at mitigation and infrastructure. Despite these concerns, deal activity in South Florida remains high – investors are betting that the long-term growth story outweighs the near-term risks. Major development projects are still moving forward, and local experts report that capital from across the country and abroad is chasing opportunities in Miami, Fort Lauderdale, and West Palm Beach. In summary, South Florida’s story is one of big rewards and equally big risks: it’s a booming region keeping an eye on the weather.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael — until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Monday, December 15, 2025. Here’s what we’re covering today: a calmer debt market as interest rates ease up, fresh signs of life in commercial real estate deals and pricing, and a spotlight on the Midwest’s surprising rental boom.

Let’s start with the financing climate. Borrowers are getting some relief as interest rates finally come off their peak. The Fed’s rate cut last week pulled commercial borrowing costs down to their lowest level since 2022, and mortgage rates have ticked down accordingly. It’s not a return to the ultra-cheap money of a few years ago, but the stability is welcome for anyone refinancing or underwriting new deals.

Meanwhile, property insurance remains a pain point. After two years of steep premium hikes due to natural disasters, rates are just beginning to stabilize. Insurers are offering breaks for buildings with strong safety records, but in high-risk zones coverage is still expensive and hard to secure. Some insurers have pulled out of coastal markets altogether. This means higher operating costs and another hurdle for deal-makers, especially in storm-prone regions.

Nationally, there are hints of a market recovery. Commercial property prices have inched up for five straight months after a long slump. The gains are small but telling: lower financing costs are enticing buyers, and sellers are adjusting expectations. Even some trophy properties in big cities are seeing values tick up for the first time in years. The bid-ask gap is narrowing and confidence is slowly returning.

Deal activity is also picking up, thanks in part to easier credit. Banks that froze up last year are cautiously lending again. New loan originations in 2025 are up sharply from 2024, nearing pre-pandemic volumes by some measures. Multifamily loans lead the pack given strong rental demand. Even a few office loans are getting done, though lenders remain extremely selective there.

But we’re not out of the woods. Loan delinquencies are still elevated, and many troubled properties remain on the books. Nearly 11% of securitized commercial mortgages are now in special servicing — essentially on life support — mostly tied to struggling office and retail assets. Banks are often extending rather than foreclosing to avoid fire sales, a classic “extend and pretend.” The hope is that time and a steadier economy will help these loans recover. For now, distress remains a key part of the story.

On a brighter note, big money is coming off the sidelines. The third quarter saw a surge in large transactions over $10 million, hitting a multi-year high. That signals institutional investors and private equity are bargain-hunting after the price correction. They’re picking up quality assets — apartments, warehouses, even some distressed offices — at discounts. This return of major buyers is a vote of confidence that the market is finding its footing.

For our regional spotlight, look to the Midwest. Middle America is a rising star in the rental housing scene. An analysis last quarter ranked Cincinnati as the nation’s hottest rental market, and several other Midwestern cities cracked the top ten. Renters are flocking to these areas for more space and affordability, trading pricey coastal living for lower-cost metros. That demand is pushing up occupancies and rents in traditionally slow-growth markets, a trend to watch heading into the new year.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Friday, December 12, 2025. Here’s what we’re covering today: we’ll start with the latest on interest rates, insurance costs, and what they mean for commercial mortgages and lending. Then we have a roundup of key commercial real estate news and market trends nationwide – from big deals signaling a rebound to where distress still lingers. And finally, a regional spotlight on the Sun Belt, where growth markets are making waves.

Interest Rates and Financing Conditions: The financing environment for commercial real estate is beginning to show some relief. Just this week, the Federal Reserve delivered another quarter-point rate cut, the third cut this year, bringing the benchmark rate into what officials consider a more “neutral” range. For borrowers, that means short-term interest rates have eased from their peak – a welcome change after the rapid rises of the past few years. The yield on the 10-year Treasury has dipped into the low-4% range, down from its highs, and that’s starting to trickle into slightly lower commercial mortgage rates. We’re hearing that well-qualified borrowers are now securing loans a bit below the peak rates seen earlier in 2025. It’s not a dramatic drop, but it’s a positive trend for anyone refinancing or seeking new debt for projects. Importantly, long-term rates remain somewhat elevated compared to pre-2022 norms, so debt is still expensive – but at least the trajectory is no longer straight up.

However, one cost that’s still climbing for property owners is insurance. Commercial property insurance premiums have soared over the past few years and are continuing to rise in 2025, though the pace has moderated slightly. On average, property insurance costs are significantly higher than they were just a few years ago – some estimates say nearly double the 2021 levels. In high-risk coastal markets like Florida and the Gulf Coast, insurers have pulled back due to repeated hurricanes and flood losses, driving premiums through the roof for those who remain. This is squeezing property cash flows and raising operating costs for landlords. Many owners are responding by shopping around for alternative coverage, raising deductibles, or even retrofitting properties to mitigate risks. But ultimately, higher insurance costs often get passed along, whether to investors through lower profits or to tenants through higher rents and expenses. It’s a tough pill to swallow, and it’s something to watch into 2026, especially if we see another year of active storms or other catastrophes.

Lending Conditions and Capital Markets: Despite the headwinds of high rates and insurance costs, there are signs of life in commercial real estate lending. Banks and other lenders are cautiously re-entering the CRE market after a prolonged pullback. In fact, loan originations have rebounded strongly in 2025. By the end of the third quarter, new commercial loan volume was up sharply – some reports put it around 85% higher than last year’s pace – bringing lending activity close to pre-pandemic levels. This resurgence is driven largely by the safer asset classes: multifamily and industrial properties have been the favorites, soaking up a big share of new loans. Even the beleaguered office sector is seeing a bit of lending again, as a few brave lenders and investors step up for deals at the right price. One analyst noted that when you see lenders willing to finance office acquisitions now, it suggests they feel asset values have finally adjusted to a point that makes sense. In other words, some confidence is creeping back that “the price is right” on certain office deals after the big value corrections of the past couple of years.

That said, credit standards remain tight and lenders are cherry-picking the best deals. The banking sector is still digesting a lot of troubled debt. Delinquency rates on commercial mortgages are hovering near their highest level in a decade (dating back to around 2014). Roughly 1.5% to 2% of bank-held CRE loans are delinquent – that might not sound huge, but it’s elevated and concentrated in certain property types like older offices and some retail. And with nearly $1 trillion in commercial loans coming due in 2025, many lenders and borrowers have been playing for time, using extensions and modifications to kick the can down the road. It’s a strategy folks jokingly call “extend and pretend”. Essentially, no one wants to realize a loss today if they believe conditions might improve tomorrow. So far, this approach has helped avoid a wave of foreclosures – banks are extending loan maturities, hoping that lower interest rates or a bit more leasing activity will materialize to improve the finances on these properties. And indeed, with the Fed now cutting rates and the economy still chugging along, there’s some rationale there. But the risks haven’t vanished: if the economy slips into a recession or if financing doesn’t come through as hoped, we could see more distressed sales ahead. For now though, industry experts suggest we’re in a “orderly reset” rather than a chaotic crash. The idea is that values and rents are gradually adjusting, and most owners and lenders are managing to hold on, albeit tightly, rather than panic-sell. Notably, the commercial mortgage-backed securities (CMBS) market – which had been flashing warning signs – is also more stable than many feared. The rate of loans in special servicing (a rough measure of distress in CMBS) has climbed, recently hitting its highest point in over a decade, largely due to struggling office and hotel loans. But even there, the majority of loans are still performing or getting worked out without fire sales. So it’s a mixed picture: pockets of distress for sure, but also resilience in many areas.

Market News and Trends: Turning to the deal scene – we’ve witnessed a real pickup in transaction activity recently. After a very slow start to the year, investment sales came roaring back in the third quarter. Nationwide, commercial real estate transactions – especially those big-ticket deals over $10 million – surged. Q3 saw the highest growth in large deal volume in ten years, with dollar volumes jumping by double digits compared to both the previous quarter and the prior year. In total, about $76 billion in large CRE assets changed hands in Q3, which is a striking turnaround and a sign that investors have started to adapt to the new normal of interest rates. Many had been sitting on the sidelines due to rate uncertainty and bid-ask gaps between buyers and sellers. Now, with some stability in financing costs and clearer pricing, buyers are coming back and sellers are adjusting expectations.

Not all sectors are equal in this rebound. Industrial and multifamily remain the darlings of investors – no surprise there. These sectors held their value best through the downturn and continue to benefit from strong fundamentals. For instance, we just saw a major transaction in Los Angeles: a Morgan Stanley-managed real estate fund paid over $200 million to acquire a big industrial complex in that market. That’s a hefty bet on the continued strength of warehouses and logistics facilities, which have been in huge demand thanks to e-commerce and supply chain retooling. On the multifamily front, demand remains robust in many cities. In fact, apartment rents in some high-demand markets have not just recovered from the pandemic dip – they’ve hit record highs. Here in New York City, Manhattan rents just reached a new peak last month (around $4,700 on average for a Manhattan apartment). So despite high interest rates and some economic uncertainty, people are still competing for places to live in major urban centers, driving rents up. That rent growth, plus long-term confidence in population trends, keeps multifamily attractive to investors. We also saw a notable financing deal in the multifamily space this week: Blackstone and its partner secured a massive $3.15 billion refinancing for Stuyvesant Town–Peter Cooper Village, an iconic 11,000-unit apartment complex in Manhattan. That loan, led by Wells Fargo and backed by Fannie Mae, is one of the largest multifamily financings of the year. It underscores that lenders – including government-sponsored enterprises like Fannie – are still willing to lend on high-quality, well-located rental housing assets, even in today’s climate.

Now, retail and office are the more complicated stories. Retail real estate has actually been quietly improving; the doom and gloom around retail has eased as the survivors – especially open-air shopping centers and essential retail – have proven quite resilient. High-street retail in luxury markets is also doing well. We’re hearing about “prime” retail strips in cities like New York, Los Angeles, and Miami seeing a surge in tenant demand. International retailers and new direct-to-consumer brands are leasing space, and rents on some of those corridors are climbing again. Essentially, the best retail spots are hot – while older malls and weaker locations still struggle. So it’s a bifurcated retail market, but not a dead one by any means.

Office, meanwhile, has been the sector under the microscope. We all know the challenges – remote work, high vacancies in older buildings, and valuation drops. But here’s a twist: recent data suggests the office market may be stabilizing and even staging a bit of a comeback. Absorption (the amount of office space being occupied) turned positive in the third quarter nationally for the first time in years. Companies are making decisions again about space – some downsizing, sure, but others relocating or even expanding into higher-quality offices. There’s also been a noteworthy uptick in office investment sales activity. Investors are picking up office buildings at steep discounts, either to bet on a turnaround or to repurpose them into something else (like apartments or labs). Just yesterday, for example, news broke that investor David Werner is nearing a deal to purchase One Dag Hammarskjold Plaza – a large office tower in Midtown Manhattan – for around $270 million. That price reportedly comes out to roughly $310 per square foot, which is a bargain for Manhattan office space that would have commanded far more a few years ago. Deals like this illustrate how far office values have fallen in some cases, but they also show that there are buyers at the right price. In fact, one commercial brokerage’s report highlighted that office sales volume in Q3 was up over 25% from a year ago. It’s still nowhere near the peaks of 2021 or early 2022, but it’s a clear improvement from the near standstill we saw when nobody knew how to price these buildings. Lenders are even cautiously coming back to the office arena for top-tier properties or strong business plans – another sign of thawing. All told, the office sector seems to have pulled back from the brink. We’re not declaring victory yet – far from it – but the phrase “the office is back” is being whispered by some optimists in the industry, at least for the highest-quality and best-located buildings. We’ll keep a close eye on that heading into 2026.

Regional Spotlight – The Sun Belt’s Ongoing Boom: For our regional spotlight today, we’re zeroing in on the Sun Belt – that swath of fast-growing markets across the Southeast and Southwest. If there’s one region that’s really stood out over the past year, it’s this one. Even amid higher interest rates and some national cooling, Sun Belt cities have stayed red-hot in growth. Let’s take the area around Atlanta, for example. An out-of-state developer just landed a $47 million construction loan for a newly built apartment community in suburban Atlanta. Securing financing for new development hasn’t been easy lately, so this deal signals confidence from lenders in the Atlanta multifamily market. And why are they confident? Job growth and in-migration. Metro Atlanta has been adding jobs and residents at a healthy clip, creating demand for housing, warehouses, offices – you name it. We’re seeing similar trends in places like Dallas-Fort Worth, Charlotte, and Nashville as well: strong population gains and diversified economies that are attracting real estate investment even when coastal markets slowed down.

Another Sun Belt standout is South Florida – particularly Miami. Miami has transformed into a magnet for both businesses and wealthy residents in recent years, and its commercial real estate reflects that. One interesting trend: prime retail spaces in Miami are seeing record interest. High-end retailers and restaurant groups are flocking to districts like the Design District, Miami Beach’s Lincoln Road, and Brickell. Rents for the best storefronts have been climbing, and vacancies are scarce, which is quite a turnaround from a decade ago when Miami retail was much more seasonal and tourism-dependent. Now it’s a year-round, luxury and lifestyle hub. On the office side, Miami is also defying the national doldrums – many firms relocating from the Northeast and California have snapped up top-tier office space in Miami and nearby Fort Lauderdale, keeping the Class A office occupancy relatively strong. The biggest challenge in Florida, as we touched on earlier, is property insurance. That’s a shadow over the market – everyone is paying more for insurance, which is affecting operating costs for offices, apartments, and especially those beachfront condos and hotels. So far it hasn’t stopped the deals, but it’s a watch item for sure.

And we can’t talk Sun Belt without mentioning the Texas and Southwest boomtowns. Austin and Phoenix are two cities often cited as leaders in startup formation and tech job growth lately. That influx of tech companies and talent is fueling real estate in those areas – you see it in big leases for new office campuses, strong apartment absorption, and a flurry of industrial projects (like data centers and chip fabs in Phoenix’s case). It’s no wonder developers keep building; in fact, Phoenix currently has one of the highest numbers of apartments under construction in the nation. Over in Texas, Austin’s office market has cooled a bit since the pandemic tech surge, but companies are still expanding there and industrial facilities around Austin (to support things like Tesla’s operations and other manufacturing) are in high demand. Meanwhile, the more traditional powerhouse of Texas real estate – Dallas-Fort Worth – continues to be a magnet for logistics and corporate relocations, which means solid performance for warehouses and a surprisingly steady office market in certain submarkets. And one more Sun Belt metro to highlight: Charleston, South Carolina. It’s smaller, but Charleston has one of the lowest office vacancy rates in the country right now. That’s partly due to limited new construction and a growing economy anchored by port trade and aerospace manufacturing. It’s an example of how some smaller Southeast cities are thriving with very healthy real estate fundamentals, even as big city offices struggle.

The common thread across the Sun Belt is population and jobs – people and companies moving in, rather than out. That growth tends to cover a multitude of sins in real estate. It keeps apartments filled, shopping centers busy, and even gives a boost to office occupancy. Investors have noticed; a lot of the capital that’s re-entering the market is targeting these high-growth regions. So, the Sun Belt looks set to remain a bright spot as we head into 2026, though we’ll keep watch on issues like infrastructure and climate resilience as these areas expand rapidly.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Thursday, December 11, 2025. Here’s what we’re covering today: an overview of mortgage, insurance, and lending rate conditions in commercial real estate, the latest national real estate and capital markets news, commentary on CRE lending conditions and deal activity, and a regional spotlight on San Francisco.

First, a look at financing conditions. After two years of rapid interest rate hikes, borrowers are finally seeing a little relief. The Federal Reserve started cutting rates this fall, and commercial mortgage rates have dipped from their peak. They’re now sitting in the mid-6% range instead of above 7% earlier this year. That’s still far above the ultra-low loans of a few years ago, so refinancing older debt remains tough. An even larger wave of loan maturities hits in 2026, which has lenders keeping standards tight. Banks are very selective and often require borrowers to put in more cash. On top of that, property insurance costs have soared in recent years due to natural disasters and higher rebuilding costs. Those premiums have begun to stabilize, but they’re still much higher than before, adding another squeeze on real estate profits.

Now, on to the market itself. Nationally, the high-rate environment has cooled the commercial real estate market, but some sectors are holding up better than others. Industrial properties and multifamily housing remain relatively strong, while the office sector continues to lag behind. Office vacancies are at record highs in many cities, especially in older buildings that tenants find less desirable, even as top-tier offices see better demand thanks to a flight-to-quality. Meanwhile, retail and hotel properties have been surprisingly resilient this year, supported by solid consumer spending and a rebound in travel.

In the capital markets, borrowing is still pricey and lenders are picky. Banks have cut back on some real estate lending, but private lenders and debt funds are filling part of the gap – at higher interest rates. Overall deal volume is down from the peak, but it’s slowly improving as sellers cut prices and buyers gain confidence that rates have peaked. Distress is mainly showing up in offices: some landlords have defaulted on office mortgages, and roughly 12% of office loans are now delinquent – a record high. Yet even here we see a silver lining: last quarter, occupied office space nationwide ticked up slightly for the first time since the pandemic. It’s not a turnaround yet, but it hints that we may be near a bottom for the office market.

For our regional spotlight today, we turn to San Francisco. San Francisco, one of the hardest-hit office markets, is now seeing an unexpected rush of bargain hunters. It actually leads the country in office building sales this year – about $4.5 billion worth traded through the third quarter, more than in New York or Los Angeles. The reason is steep discounts. Values have fallen so far that opportunistic buyers are swooping in, betting on a long-term comeback for the city’s tech-driven economy. A few big new leases by expanding AI and tech firms have added some hope as well. There’s still a long way to go — vacancies are very high — but this wave of discounted deals has injected cautious optimism that even San Francisco’s downtown can recover in time.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Monday, December 8, 2025. Here’s what we’re covering today: a snapshot of interest rates and why borrowing costs may finally be easing; the latest on insurance woes in commercial real estate; a check-in on deal activity, lending conditions and distress as we wrap up the year; and in our regional spotlight, a surprising comeback story out of Detroit.

First up, interest rates. After a long stretch of rising financing costs, we’re finally seeing some relief. Mortgage rates have dipped to their lowest level of the year – the 30-year fixed is just above 6% – as inflation cools and speculation grows that the Federal Reserve might trim rates soon. This pause in rate hikes is a welcome breather for commercial real estate dealmakers.

On the flip side, insurance has become a major headache for property owners. Commercial property insurance premiums have roughly doubled since 2021 due to natural disasters and higher rebuilding costs, and they’re still rising far faster than inflation. In high-risk areas, some big insurers have pulled out entirely, leaving landlords with sky-high quotes from the few remaining carriers. These hefty insurance bills are baked into underwriting – they’re even killing deals or forcing sellers to lower prices.

Now let’s turn to market activity. The first half of the year brought a pickup in deal volume from 2023’s lows, but by fall buyers and sellers hit another stalemate. October saw a slight dip in sales compared to last year, as higher interest rates and murky property values kept many investors on the sidelines. Sellers have been reluctant to drop prices, while buyers facing expensive financing are insisting on discounts – a recipe for gridlock. The result is fewer deals getting done in recent months, though overall 2025’s transaction volume is still likely to beat last year’s.

One bright spot has been hotels, fueled by a travel resurgence – the hospitality sector even notched higher deal volume this fall than last year. A luxury Manhattan hotel sold for over $230 million, showing that investors believe tourism is back.

Offices remain the biggest trouble spot. With office vacancies high, refinancing is extremely tough for anything but the best buildings. Some owners have simply walked away and handed the keys to their lenders rather than try to refinance. Distressed sales are up, mostly in the office sector – about one in six office loans is now troubled. Yet some investors are bargain-hunting, snapping up office buildings at deep discounts hoping for a turnaround. And an uptick in office-to-residential conversions offers a hopeful path to chip away at the glut of empty space.

Now for our regional spotlight: Detroit – a city finally stirring back to life. Detroit’s population has ticked up for the first time in 60 years – a small gain but a symbolic milestone for a city long associated with decline. That comes as Detroit’s economy diversifies – it’s still the Motor City, but now also adding jobs in healthcare, tech and finance that are bringing people back. Downtown and Midtown have seen major investment, from new office and residential projects to historic buildings rehabbed into apartments, hotels and startup hubs. There are still challenges and not every neighborhood is thriving, but investors have Detroit on their radar again, drawn by low costs and growth potential. The city’s narrative is slowly shifting from blight to revitalization.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!